Adjustment to the Proposal on Reward Membership Program Following Legal and Ethical Concerns

Response Memo
Student’s Name
Institution
Response Memo
To: All Stakeholders
From: Marketing and Sales Department
Subject: Adjustment to the Proposal on Reward Membership Program Following Legaland Ethical Concerns
Following the proposed loyalty membership program aimed at improving loyalty among the low-income population to our products, the company’s legal team has expressed its concerns over the potential loopholes that may evoke legal and ethical issues from the proposed strategy. The marketing team dully acknowledges the legal team's concern and also appreciates the pieces of advice offered. Consequently, the marketing team through this memo would like to lay bare the plan that would help the program sail through without evoking any of the legal and ethical concerns identified by the legal team and also help the company realize its overall goal.
Legal Issues
Truth in Advertising
One of the proposed marketing strategies to reach the target market is the use of direct mails for those who already exist in the company’s mailing list, leaflets, and flyers distributed to the target market by recruits working on behalf of the company. Direct mailing is a more personalized and effective advertisement strategy where the company can reach the intended target market more precisely (Key & Czaplewski, 2017). The mails can be designed to bear the same information as the leaflets and flyers. The legal team, however, has raised concerns on the content of advertisement for failure to meet the fundamental requirements for legally accepted advertisement materials.
The legal team’s major concern on the advertisement materials is that the marketing team needs to “be precise in making statements about the program’s benefits, commercial speech must be non-deceptive, advertisers must be able to substantiate direct or implied superiority claims.” The three conditions have not been met as per the legal team analysis of the advertisement material and in particular, the ad lines, could cause a problem with the U.S. Federal Trade Commission. FTC states “claims in the advertisement must be truthful, cannot be deceptive or unfair, and must be evidence-based.” (FTC.gov, n.d.). Content such as “membership pay for itself” can be considered deceitful because the target customers still have to make purchases to earn points and they also need to register to become members. The other ad line gives an impression that the more an individual makes purchases, the more the community benefits. In reality, the community stands to benefit when many people from that community make more purchases. Substituting the ad lines with more realistic lines such as “register to get rewards” and “more people more benefits” would still be more appealing to the target customer and also evade the truth test by the authorities.
Data Collection and Privacy
The legal team also raised some concerns about data collection and privacy. Security of personalized information and privacy is considered a fundamental human right and hence the need to have legislation to protect individual privacy and personalized information. Some data protection laws such California Consume...